Serbia, Russia say Ready to Go Ahead with South Stream Gas Line

BELGRADE —  Russia said on Tuesday it expected Serbia to begin building its leg of the Gazprom-led South Stream gas pipeline as planned in July, saying Belgrade and Moscow were ready to move forward with the project.

Against a backdrop of conflict in Ukraine, the pipeline plan has become a focus of tension between Russia and the European Union, with Serbian neighbor Bulgaria this month suspending construction at the behest of Brussels pending a ruling on whether the project complies with EU law.

Serbia finds itself caught between its ambitions to join the EU, with which it has started accession talks, and historical ties with Russia. Gazprom's oil arm, Gazprom Neft, owns 51 percent of Serbia's main oil company, NIS.

Construction of the Serbian leg is due to begin in July.

“We confirmed our readiness for South Stream and the need to carry it out as it is the only realistic project for gas security in southeastern Europe,” Russian Foreign Minister Sergei Lavrov said after meeting his Serbian counterpart Ivica Dacic in Belgrade.

“All agreements remain in force and no changes have occurred,” he said. “We consider that everything will proceed as planned.”

Dacic, who heads the junior partner in Serbia's ruling coalition, said: “All economic projects that have been started will be continued. It is in our national interest for South Stream to be built.”

South Stream is designed to pipe 63 billion cubic meters of gas per year from Russia via the Black Sea into central and southern Europe, bypassing Ukraine as Russia seeks to cement its position as Europe's dominant gas supplier.

Moscow on Monday cut gas supplies to Ukraine in a row over prices but insisted Kiev must let Russian gas flow across the country through international pieplines to clients in the EU.